Royal Caribbean Cruise Line has entered into an agreement with Chantiers de l'Atlantique for the construction of up to two more 75,000-ton, 2,000-passenger ships, scheduled for delivery in April 1997 and April 1998. The second order is subject to reconfirmation prior to June 1, 1995.

The ships are the fifth and sixth new vessels RCCL will introduce in the next three and one-half years.

Chantiers de !'Atlantique is currently constructing two 70,000-ton, 1,800-passenger ships, Legend of the Seas and Splendour of the Seas for RCCL, slated for delivery in April 1995 and March 1996.

In addition are two 73,000-ton, 1,950-passenger ships being built by Kvaerner Masa-Yards.


The new order gives RCCL the largest shipbuilding program in the industry with six ships planned in the next three and one-half years at a cost of approximately $1.75 billion.

In addition, at an estimated building cost of $275 million per ship, the per berth cost falls to $137,500 which puts RCCL in the enviable position of selling beds that cost the Line less than what competitive lines are paying. That again translates into more price flexibility and larger profits when demand is up.

The big cruise lines always have building projects under consideration. So when the price is right, they strike. Meanwhile. a smaller cruise line, or start-up, which have to build within a certain time frame, are at the mercy of the builders.

Mitsubishi RCCL has also announced that it will work with Mitsubishi Heavy Industries on the design and engineering of a new generation of RCCL cruise ships. According to RCCL, "exact ship size and passenger capacity will evolve as the design takes shape. "Industry sources, meanwhile, expect to see new ships in excess of 100,000 tons.

Company sources underlined, however, that the agreement with Mitsubishi only includes design and engineering for the time being. While a building contract for the Japanese may follow, it is by no means certain. It is not uncommon for shipyards to design ships that later are built elsewhere. Kvaerner Masa­ Yards for example have designed all the RCCL ships -­ even those that have not been built in Finland.

Industry sources also suggested that the agreement is a face-saving for Mitsubishi which did not get the third round of Project Vision ships and has not received any cruise ship building orders since it built the Crystal Harmony. Mitsubishi also lost the second Crystal Cruises ship to Kvaerner Masa.

While there is a little doubt about the Japanese builder's capability, other key factors include building cost which often is the result of currency fluctuations, de-evaluation, and financing arrangements.

Shares are Up

At press time, RCCL shares reached $29 just short of their 365-day high of $30.